International Centre for Financial Regulation: overview of OTC derivatives markets regulation
09 February 2010
Nicole Hergarten, Director of Training at the ICFR, gave a seminar on OTC derivatives. She highlighted the G20 targets for OTC regulation and that by the end of 2012, all standardised OTC derivatives contracts should be traded on exchanges and cleared through central counterparties.
The presentation is entitled "Proposed regulatory reforms and related risk management considerations". The following points were addressed:
• US, European and worldwide initiatives – aims of OTC reform
Increased supervision and regulation
Transparency through record-keeping and reporting
Greater efficiency
Capital considerations (Basel III?)
• Migrating OTC onto a central clearing model or exchange
• Disclosure of risk management practices
• Governance requirements
G20 targets for OTC derivatives regulation
Leaders’ statement, Pittsburgh summit, 25 September 2009
1. All standardised OTC derivatives contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012.
2. OTC derivatives contracts should be reported to trade repositories.
3. Non-centrally cleared contracts should be subject to higher capital requirements.
4. The FSB and its relevant members have been asked to assess implementation on aregular basis, and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk and protect against market abuse.
© ICFR - International Centre for Financial Regulation
